919 F. Supp. 2d 1130
W.D. Wash.2013Background
- 55 plaintiffs and 7 defendants (BANA, Countrywide, MERS, others) are involved in securitized mortgage loans; plaintiffs allege securitization left BANA without right to enforce or foreclose; no foreclosures are pending and many loans are current; plaintiffs seek to identify creditors and challenge foreclosures under complex debt instruments; court grants motion to dismiss several claims and allows limited amendment for fraud and declaratory relief.
- The case discusses application of debt-collection and non-judicial foreclosure laws to mortgage-backed securities and securitized debt.
- Plaintiffs allege fraud, CPA, FDCPA violations, and declaratory relief to identify rightful creditors and foreclosure rights.
- Defendants contend plaintiffs lack standing, fraud pleading is deficient under Rule 9(b), and declaratory relief is improper absent a real controversy or independent right.
- Court concludes lack of standing defeats CPA and FDCPA claims and parts of the fraud claim; fraud pleadings fail Rule 9(b) specificity; declaratory relief denied for ownership question but leave to amend may be allowed for some claims.
- The order grants in part and denies in part the motion to dismiss, with some claims dismissed with prejudice and others without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to sue on CPA and FDCPA claims | Plaintiffs allege injury from potential wrongful foreclosure | BANA and others show no current injuries or foreclosures | Plaintiffs lack standing; CPA and FDCPA claims dismissed with prejudice |
| Fraud claim sufficiency under Rule 9(b) | Allege broad scheme including HAMP-related misrepresentations | Fraud pleadings insufficiently particularized | Fraud claims grounded on wrongful foreclosure dismissed with prejudice; HAMP-based theory analyzed but pleading lacks specificity; leave to amend granted for fraud within 20 days |
| Declaratory relief on loan ownership | Plaintiffs seek declaration of who owns loans and can receive payments | Declaratory relief requires justiciable controversy and substantive rights | No immediate controversy or statutory right shown; declaratory relief denied without prejudice, amendment allowed for ownership questions |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requires injury, causation, redressability)
- Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) (fraud pleadings require specificity: who, what, when, where, how)
- Neubronner v. Milken, 6 F.3d 666 (9th Cir. 1993) (information-and-belief pleading requires factual basis for belief)
- Kirkham v. Smith, 23 P.3d 10 (Wash. Ct. App. 2001) (nine elements of fraud under Washington law)
- Bain v. Metropolitan Mortgage, Inc., 285 P.3d 34 (Wash. 2012) (explanation of MERS and securitization context in mortgage finance)